Interactive Brand Development, which also owns significant investments in Penthouse Media Group and XTV-parent ITVN, said in a filing Thursday with the Securities and Exchange Commission that it is shopping around its iBill brand and intends to get out of the adult entertainment business.
For the last year, Interactive Brand has attempted to cut numerous deals to breathe life into iBill, particularly with an outsource agreement with Etelegate. But that deal later soured and iBill’s operations were discontinued.
Three years ago iBill was one of the top third-party processors along with CCBill and Paycom. But its current woes can be pinpointed at problems when it was notified by First Data Merchant Services that it was dropping iBill from its merchant account.
Subsequently, the company attempted to secure another merchant account holder and, according to some, failed to tell its clients, mostly online adult companies.
So far, the company said it has negotiated $9.7 million in 627 settlements with adult webmasters, with current pending claims at $450,000.
But some of those settlements haven’t yet been worked out.
“The company has failed to comply with the settlement terms of several of the settlement agreements due to its lack of working capital and has failed to provide answers to certain claims filed by webmasters,” Interactive Brand said in a statement. “The failure to provide answers has resulted in default judgments and the failure to comply with settlement agreements resulted in concessions of judgments.”
As of February, 116 lawsuits were pending against iBill’s parent company, principally within Broward County, where it is located. The company revealed those suits filed by adult webmasters could amount to $53 million.
So far, the company has been ordered to pay $8.9 million in default judgments to adult webmasters.
As of March, the company said it had a working capital deficit of $51.5 million but in the last six months it had no income.
Meanwhile, the company also revealed Thursday that its long-time senior executive, Gary Spaniak Jr., resigned last month. Spaniak had been president of the Deerfield Beach, Fla.-based company.
Calls to Interactive Brand CEO Steve Markley to elaborate on the latest attempts to resuscitate the company and webmaster lawsuits and judgments went unreturned to XBIZ at post time.